Early this month, a news story reported that the Mint had halted production of the new $1 Sacagawea golden dollar coin. We thought nothing of this, since the Mint produces the quantity of coins required to meet demand, as determined by orders from the banking system. It takes a quarter of a century for a typical coin to suffer enough wear to mandate its withdrawal from circulation. In the six months following the new dollar coin's introduction, production volume exceeded the entire output of Susan B. Anthony dollar coins over more than two decades. Enough now are available through the Federal Reserve to fill orders, and there is no reason to make more until the existing stocks are depleted.
However, that is not how many people heard the story. During the following week, we were informed by acquaintances that they had been told that the new dollar coin had been "discontinued." We received a message from an operator who said he actually had spoken with someone at the Mint who told him that. He was concerned because he is using the dollar coin successfully. The National Automatic Merchandising Association heard the same sort of thing, and sent out a letter to its members to clarify matters.
The story was foolish, of course. Insofar as it reported that production had halted, it was not news, under the old journalistic principle that a dog biting a man is not news - it happens all the time. To the extent that it implied "discontinuation" of the coin, it was misleading. Congress mandated production of the Sacagawea coin, and the Treasury Department must meet the demand for that coin until future legislation directs it to do something else. Traditionally, the journalistic "silly season" begins in August, but it has been a warm winter.
Some operators have put this canard to good use. They have contacted their local newspapers to explain that, far from being discontinued, the golden dollar is being used in their operations, and that customers like it very much. This can be an opportunity for positive publicity.
But the episode does point up the continuing bottleneck represented by our reluctance to eliminate the dollar bill. This failure has put the United States in a rather odd position. Twelve nations of the European Union have replaced their traditional coins and bills with the new euro currency, whose coin set includes a two-euro piece, worth just over $1.75 U.S. at this writing. Canada has a $2 coin in circulation; so does Australia. Japan uses a 500¥ coin, worth about $3.85 U.S., and the United Kingdom has a £2 coin, worth about $3.90 U.S. None of these countries has a banknote of the same denomination as its highest-value coin; as far as we know, the United States is unique in this respect.
Two reasons have been advanced for this peculiarity. One is that the $1 bill, with its famous depiction of George Washington, is revered by our citizens and, as a sentimental favorite, cannot be discontinued. The other is that the people who supply materials for the production of banknotes, and those employed in their manufacture, have been successful in protecting their interest in the continuing issue of the bill. It's consumed rapidly, in vast numbers.
It seems to us that there is a practical solution to both of these obstacles: redesign the $2 bill (still legal tender, but seldom seen) to bear a portrait of George Washington, and discontinue production of the $1 bill. Thomas Jefferson, who presently is commemorated on the $2 banknote, also is depicted on the nickel, so he will not fade from public memory. In the absence of a $1 banknote (which, as a former president of NAMA reminded us, is approximately equivalent to a 1960 quarter), that new $2 bill would circulate, and so would the $1 coin.
By all accounts, people like the Sacagawea dollar. A VENDING TIMES staff member, counting a handful of them while riding in an elevator, did a brisk business in disposing of them to other riders in exchange for $1 banknotes. The usual comment is, "Wow! That's a really nice coin, but I never see any." Nor will they, until the coin routinely is given as change. That will not happen as long as the $1 slot in cash register drawers is filled with banknotes.
It's important that we keep telling our elected officials that it's time to let the $1 bill go the way of the two-cent piece. That move would be good for the public treasury, beneficial to commerce, and just plain common sense.